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Latest move to ‘fee-for-advice’ a positive step

The Deputy Chairman of ASIC, Mr Jeremy Cooper, has said that ANZ’s decision to move away from commissions to a ‘fee-for-advice’ remuneration model for its financial planners was yet further evidence of positive change in the financial planning industry. ‘We are pleased to see another major industry player moving to this model, following earlier moves by other participants (including AXA, Financial Wisdom, MLC and RetireInvest) last year,’ Mr Cooper said. ‘A fee-for-advice model requires planners to explain and justify the value of their advice in a much clearer way. Consumers can then decide for themselves how much they think the advice is worth. By contrast, the commission model has the following deficiencies:remuneration automatically increases depending on the amount invested, regardless of whether any value is added; payments can go on for years; well after the consumer has forgotten all about the advice; and commissions paid by product issuers tend to influence the advice and products that consumers receive and even the quality of the advice.’

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